As worry about the pandemic has declined, the recruiter has outperformed this year but the investment bank expects the shares to de-rate.
In a note on Tuesday, Morgan Stanley downgraded the recruitment firm to ‘underweight’ from ‘equal weight’ but upped its target price to 545p from 525p, justifying its de-rating expectation on the fact that the shares were now trading at 18.7 times price/earnings on pre-COVID peak earnings.
The assessment follows a first-quarter trading update from PageGroup in early April when the company reported that business had picked up month-by-month throughout the period with March just 2% below a year ago.
The company also said its full-year operating profits are still expected to be within the range of GBP90-100mln.
Shares in PageGroup were down 2.7% at 588.5p in late morning trading.